Mozambique debt restructuring to drag on until 2019 at least - Consultant
Lusa (File photo)
The Mozambican Workers’ Organization (OTM-CS) said in Maputo yesterday that the country was in “near bankruptcy” and accused the political class of “treason”, adding that “patience has its limits.”
“In addition to the political-military crisis, the year about to end [has been characterized by] economic and financial crisis caused by the external situation, the country’s excessive indebtedness and natural calamities. All these factors have led us to the state of near-bankruptcy in which we are immersed,” the secretary general of OTM-CS, Alexandre Munguambe, said in the organization’s year-end address.
Munguambe pointed out that the lack of confidence of international donors and creditors vis-à-vis Mozambique had led to international aid being cut, inward investment slipping to historical lows levels and inflation soaring to historical highs.
The current cost of living, he continued, can neither be ignored nor perpetuated by politicians and economic managers.
“We therefore alert [them]to the dangers of this situation, while at the same time recalling that patience has its limits,” he added. The OTM-CS is allied with the ruling party, Frelimo (Liberation Front of Mozambique).
Munguambe accuses the Mozambican political class of having betrayed the people by permitting political and military confrontation to spiral out of control, referring to clashes between the Defence and Security Forces and the armed wing of Renamo (Mozambican National Resistance), the main opposition party, in the center and north of the country.
“In this way, the country and its people have been betrayed by this group, which has plunged the country into a crisis the consequences of which are now being borne by workers and their families,” he said.
Official data indicate that Mozambique will close the year with economic growth below 4 percent, the lowest for the last 15 years, and inflation close to 30 percent, a historic high compared to inflation below double digits in recent years.
At the same time, the metical has slipped more than 40 percent in value against the dollar, investment has declined sharply and debt service has reached levels considered unsustainable.
The country is facing political and military instability following Renamo’s refusal to accept the results of the 2014 general election. Renamo demands that it govern in the six provinces where it claims electoral victory, and accuses the ruling party, Frelimo, of fraud in the count.
Government and Renamo are involved in peace talks, but without tangible results so far.Source: Lusa